Crowding Out Refers to A(n)

question 38

Multiple Choice

Crowding out refers to a(n)

• A) increase in the consumption of domestic goods and services at the expense of imports.
• B) increase in the consumption of imports at the expense of domestic goods and services.
• C) decrease in exports because of higher government spending.
• D) decrease in consumption or investment spending caused by increased government spending.
• E) decrease in government spending caused by higher private-sector spending.

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Definitions:

Income

The money received by an individual or business in exchange for labor, services, or investment, constituting a basis for consumption and savings.

Consumer Equilibrium

The point at which the amount of goods purchased by a consumer is equal to their preference at prevailing market prices, maximizing utility.

Utility

The satisfaction or benefit a consumer derives from consuming a good or service.

Income

Money that an individual or business receives, typically as payment for goods or services or through investments.